NEA Hearing Comments on Corporate Tax Loopholes and President Obama’s FY15 Budget Proposal
March 11, 2014
On behalf of the three million members of the National Education Association, and the students they serve, we offer our views on the need to close costly corporate tax loopholes in connection with this week’s hearing “The President’s Fiscal Year 2015 Budget and Revenue Proposals.”
The road back from the worst recession since the Great Depression has been difficult, and while progress has been made much more remains to be done. We need an economy that works for everyone – an economy built on the truly American ideal that everyone deserves a fair shot and an opportunity to succeed, an economy in which those who work hard will be able to provide for themselves and their families. Each of us must do our part to help this nation achieve the shared prosperity we all seek.
Sadly, that is not happening today. A comprehensive new study shows some of the nation’s most successful businesses paid little or no taxes between 2008 and 2012. Tax handouts to the 288 Fortune 500 companies that were profitable each of those five years cost the nation $362 billion in unclaimed revenue, according to the study by Citizens for Tax Justice and the Institute on Taxation and Economic Policy.
The loss of revenue due to corporate tax loopholes and subsidies can lead to funding shortfalls for critical programs and services that benefit students–such as expanding early childhood education opportunities, making college more affordable to those who want to pursue it, and fully funding the Individuals with Disabilities Education Act to name a few examples.
Simply put, we cannot adequately invest in education so long as we continue to watch billions leave the system because of an unfair tax code, highlighted by these corporate loopholes. Tax loopholes and budget cuts are inextricably linked, and sometimes the trade-offs can be startlingly clear. Eliminating the "carried interest" tax break given to hedge fund managers, which allows them to cut their tax rate in half, could save $1.7 billion - which would account for more than half of the cuts education faced in FY13.
For our economy to work for everyone, we need to amend the tax code to ensure that corporations and the wealthiest contribute their fair share – to grow our economy by growing the middle class. At home, families are struggling to hold on to what they have. At school, students most in need are confronting cuts to the critical programs they need to succeed. Meanwhile, special exceptions allow income inequality to continue growing. Corporations are reporting record profits, yet are taxed at historically low rates. That must change if the American dream is to endure
Congress can help deliver on the promise that the American dream is for everyone, not just the wealthy few. We thank the Committee for holding this important hearing and for listening to our views.
Director of Government Relations